The Bank of Japan on Thursday lowered its economic growth forecast for the current and 2010 fiscal years and revised its inflation outlook downward amid the global recession.
With little room left for a further rate cut, however, the BOJ decided to maintain its key interest rate at 0.1 percent. It also refrained from expanding a program of purchasing corporate and government debt.
"Economic conditions are likely to continue deteriorating in the coming months but gradually level out thereafter, and the growth rate is expected to recover at a moderate pace from the latter half of fiscal 2009," the BOJ said in a statement released after its Policy Board meeting.